WorleyParsons wins $8bn refinery deal

30 November 2007
Australia's WorleyParsons has scooped one of the largest basic engineering deals in the kingdom this year, winning the first contract for Saudi Aramco's $8bn East Coast refinery at Ras Tanura.

WorleyParsons beat competition from the US' Foster Wheeler and Canada's SNC Lavalin to win the deal, which covers project management, front-end engineering and design, design support and construction management services.

The signing of the contract signals the importance of expanding the kingdom's refining capacity to keep pace with a planned boost in production capacity to 12.5 million barrels a day (b/d) by 2009.

Aramco aims to build three other refineries in the kingdom, with capacity set to grow by 1.6 million b/d over the next five years, to reach 3.8 million b/d by 2012. The contract with WorleyParsons will be signed in the first week of December, with the refinery scheduled for completion in the first quarter of 2012. This adds several months to the original deadline of the end of 2011.

Aramco will completely own the refinery, which will be used to meet domestic demand for fuel oil, according to a source close to the project.

Several aspects of the project have also changed since the scheme was first proposed in July this year (MEED 13:7:07).

The refinery will have capacity to process up to 400,000 b/d of Arabian heavy crude and will contain several other units including a 210,000-b/d vacuum unit, a 90,000-b/d diesel hydrotreater unit and a 120,000-b/d visbreaker, to raise the yield of more valuable middle distillates, such as heating oil, diesel fuels and kerosene.

It will also house a 30 million-cubic-feet-a-day hydrogen plant and a 50,000-b/d crude catalytic reformer. Other process elements include a two-train 185-tonne-a-day sulphur recovery facility, an 820-gallon-a-minute amine regeneration unit, and utilities, control systems and downstream pipelines.

Aramco has previously signed deals with France's Total and the US' ConocoPhillips to build refineries at Jubail and Yanbu, with a combined capacity of 800,000 b/d. Expressions of interest have also been submitted for a third export refinery at Jizan in the southwest, with a capacity of 250,000-400,000 b/d.

While Jubail is expected to proceed, doubts remain over Yanbu and Jizan because of increasing costs.

Estimates show the cost of building the Yanbu export refinery has spiralled to at least $12bn from an original $8bn. Aramco and ConocoPhillips are expected to make a joint investment decision on whether to proceed with the project early in 2008.

Further down the coast, the privately run Jizan refinery is struggling to attract interest from international oil companies, because of concerns over costs and its remote location. However, oil ministry officials maintain that the project will proceed, with tendering due to begin in the first quarter of 2008.

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